Companies like Catamaran Corp. (CTRX), Cerner Corp. (CERN) and athenahealth (ATHN) are enabling the adoption of meaningful use health care technologies for compliance with the HITECH Act, driving companies to adopt and use electronic health records, evolving the practice of health care toward a more data-analysis based model, says Michael Cherny, Managing Director and Analyst at ISI Group LLC.
“It’s been an interesting divergence within the industry, both from a growth perspective and a performance perspective, for the stocks of companies that sell electronic health records. The major divergence has been between the companies that have been taking share in certain solutions and the companies that have either had product issues and/or have hit some sort of growth wall in their space,” Cherny said.
Cherny is positive on Catamaran, the pharmacy benefits manager. “We have an ‘overweight’ rating driven by the ability for them to move up market and compete more effectively in the large employer market to win incremental deals there, while still keeping their strong focus within the middle markets and health plan areas,” he said.
Cherny is also positive on Cerner and athenahealth. “Cerner has obviously been a major beneficiary of their broad product solutions and product architecture. They’ve been able to win new customers and continue to see strong revenue and bookings growth,” he said, and adds, “athenahealth’s growth has also remained at elevated levels from the rest of the group, driven in large part by the focus on driving cash flow enhancements for physicians while also selling electronic health record solutions.”
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